NEW YORK: Google parent Alphabet Inc.’s Class A shares (Nasdaq: GOOGL) fell 12.64% on Thursday, closing at $283.82 from $324.89 after its earnings renewed investor concerns about returns on artificial intelligence spending.
The company’s market value lost about $ 480 billion. Advertising and search revenue growth disappointed investors, while Alphabet signalled another significant increase in capital expenditure in 2027.
Its spending forecast for 2026 stands at $195 billion to $205 billion. Chief executive Sundar Pichai described the investment programme as a long-term planning exercise rather than a short-term allocation decision.
Briefing.com attributed the market reaction to renewed doubts about returns from AI investment. Alphabet’s decline helped pull the Nasdaq Composite down 365.13 points, or 1.4%, to 26,184.72.
Selling was uneven across the market.
Edward Jones analyst Angelo Kourkafas said shareholders wanted clearer evidence that investment would produce stronger profits. Eli Lilly and Mastercard gained after their earnings reports, highlighting differences in individual company performance.
“Money is not exiting equities. It’s just moving around and rotating,” Kourkafas said.
Thursday’s economic releases showed faster US growth alongside rising annual inflation. An advance estimate from the Bureau of Economic Analysis put third-quarter economic growth at an annualised 3.4%, up from 2.2% in the previous quarter.
Investment, consumer spending and government spending contributed to the expansion, while exports declined.
Read More: Alphabet Q2 Profit Hits $112.1bn on Investment Gains
Separately, the Personal Consumption Expenditures price index rose 3.6% year on year in September, compared with 3.4% in August. Those figures followed the Federal Reserve’s decision on Wednesday to leave US interest rates unchanged.
European shares advanced earlier on Thursday. Across the Atlantic, the European Central Bank (ECB) held its deposit rate at 2.5% after two increases this year.
ECB President Christine Lagarde announced her early departure on the same day. She told reporters she wanted greater freedom to discuss subjects beyond monetary policy.
Eurozone inflation reached 3.8% in September as energy costs increased during the Middle East conflict. ECB policymakers described underlying inflation as broadly stable, while acknowledging that the full effects of the energy shock were still developing. Lagarde is due to leave office on February 7, 2027.
(With additional input from AFP and AP)
